When you start a new job, you’re usually handed an array of paperwork – even digital-first companies still resort to paper for some of these items. They may include a copy of your employment contract that you had signed, information about how to claim employee health benefits, and some opaque-sounding booklet known as an employment manual.
While job-specific training may be given one-on-one or in small groups, these employee manuals often apply to the whole company and, at first glance, often sound very generic. Of course, you know not to miss work, not to come into the office in a bathing suit, or not to let strange visitors onto the premises.
You probably haven’t taken a close look at your employment contract either. The longer that it is, the more it just looks like…well… “legalese.” You’re happy to work off of the terms that you agreed upon with your employer before starting, and all the rest are simply formalities. Right?
Not quite. For employers and employees alike, those contracts and policies may seem like standard form, but they’re more important than you might think. From the ways that employees can be disciplined for misconduct to the amount that they may be owed on termination of employment, it’s all in there. And, if it’s not, the employer may have an unpleasant surprise on their hands.
Contracts 101
Most jobs do not legally require a written employment contract. If you run a convenience store and hire a high school student from the neighbourhood to come stock shelves after school, you likely won’t put them under a lengthy written employment contract. You’ll probably agree to their hours, their wage, shake hands, and suddenly you have an employee.
So why are employment contracts important?
Employment contracts, with a great deal of certainty, set out the terms and conditions of an employee’s employment. They’ll often include common clauses such as hours of work, compensation, potential benefits and bonuses (if available), non-solicitation clauses, and termination clauses if either the employer or employee wishes to end their employment.
While many of these clauses may seem standard on a quick reading, they actually spell out the specifics and set a minimum standard for employees. For example, if your contract guarantees an annual bonus, that bonus then becomes part of your compensation. If you’ve negotiated any other perks into your contract, ensure that they are clearly in writing so that you have them as a certainty.
Without a contract, provincial employment law (such as the Employment Standards Act in Ontario) is usually the standard. No contract can offer less than the law, so for example, minimum wage, hours of work and overtime, minimum vacation time, etc., are all set by the law, and while a contract can exceed those, it cannot go beneath them.
The difference, however, is in termination pay. The law does NOT set the default on pay for employees who have been terminated, and a contract must do that explicitly to restrict an amount that an employer may owe an employee upon termination. Otherwise, the employee may be able to earn significantly more. The difference can sometimes be two months’ compensation with a contract vs. two years’ payout without!
Policies 101
Similar to contracts, workplace policies are not well understood, although some may be legally required (bullying and harassment policies, for example). Yet even if they exist in written form, most employees will not take more than a cursory glance at a policy manual before slipping it into a drawer and forgetting it ever existed.
Yet those policies say more than most would expect. For both employers and employees, they underline the expectations of working for that employer. In short, the employer makes the rules and can craft policies in line with their wishes. If they want employees to only wear a certain colour of clothing, or to only use company-branded mugs in the office, they can do that.
Other policies gained greater influence in the COVID era with the shift to remote work. Employers needed to revisit work from home policies, along with technology and social media policies, to implement new policies such as for masks and social distancing during lockdowns.
While employees may not give most policies much thought, they are critical for employers when it comes to creating the workplace that they want to see. More importantly though, they are also necessary when it comes to discipline. If you wish to discipline an employee for a policy violation, those expectations and the potential for discipline (including even dismissal) should be clearly written into the policy itself.
Policies also provide some level of certainty for employees about the expectations within their workplace. If they find themselves subject to discipline for a policy violation that was never written or made clear to them, or if policies are being imposed differently on them than they are on their coworkers, then they may have a legal claim against their employer.
Takeaways for employers
For employers, contracts and policies should never be stagnant documents. If you have not had your contracts and policies updated in some time, not only do they likely not say what you think they do, but they’re likely not protecting you like you think that they are. The law requires that some policies are reviewed and updated annually, but all contracts and policies should be reviewed regularly to ensure that they are offering the proper protections.
Contracts and policies also need to be issued properly in order to be effective. For example, an employment contract needs to be issued and signed before the employee starts work, and if it is done after, it may not have any impact at all. Our team of experienced employment lawyers can guide you through the issuance process as well.
If you believe that an employee has been violating policies, consult our employment lawyers before making any decisions. Before you plan on disciplining or terminating an employee, make sure that you are legally protected as much as possible. Otherwise, you may be inviting a complicated legal claim that will cost you far more than a consultation fee.
Takeaways for employees
For employees, knowing the contents of your employment contract and your workplace policies can be crucial. If your employer is not ‘playing by the rules,’ such as implementing policies unfairly or making ad hoc changes to things that you have not agreed to, you may have a legal remedy available to you, which we would be happy to assist you with.
Employees should also review their employment contracts with an employment lawyer BEFORE signing on the dotted line. While that contract may look standard, it spells out how much you may be entitled to in the case of wrongful dismissal, and agreeing to a bad deal at the outset may put you in an unfavourable position later on. We are here to help you make an informed decision. Contact us today, and one of our friendly intake coordinators will help you set up a consultation.
